A.  If the price of Pappy Van Winkle Bourbon (trust me, it exists) retails for $150 per bottle and the State Board of Equalization decides to tax spirits at 10%, illustrate (DRAW A GRAPH) and explain if demand is relatively elastic, who bears most of the tax and why. BE SURE TO LABEL YOUR GRAPH AND EXPLAIN EQUILIBRIUM PRICES BEFORE AND POST TAX.  THE SAME APPLIES TO "PART B" BELOW.  B.  Pappy again...this time illustrate and explain if sellers of the bourbon are elastic, who bears the brunt of the tax and why.  C. Lastly, it seems that although the nation is coming out of the COVID crisis, in some areas, there are still labor shortages. Of course, childcare costs contribute to some of the reason behind why many parents opt to "work from home," but a lot of folks aren't parents...hmm.  Let's see if Indifference Curves might offer some explanation... How might you explain -with leisure measured on the vertical axis and working hours on the horizontal along with an indifference curve attached and budget constraint drawn- "why" people are working less if income is held constant (doesn't change)? What direction might the curve move while still tangent to the same budget constraint representing income if incomes were held constant as a part of COVID relief?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

A.

 If the price of Pappy Van Winkle Bourbon (trust me, it exists) retails for $150 per bottle and the State Board of Equalization decides to tax spirits at 10%, illustrate (DRAW A GRAPH) and explain if demand is relatively elastic, who bears most of the tax and why. BE SURE TO LABEL YOUR GRAPH AND EXPLAIN EQUILIBRIUM PRICES BEFORE AND POST TAX.  THE SAME APPLIES TO "PART B" BELOW. 

B.

 Pappy again...this time illustrate and explain if sellers of the bourbon are elastic, who bears the brunt of the tax and why. 

C. Lastly, it seems that although the nation is coming out of the COVID crisis, in some areas, there are still labor shortages. Of course, childcare costs contribute to some of the reason behind why many parents opt to "work from home," but a lot of folks aren't parents...hmm.  Let's see if Indifference Curves might offer some explanation...

How might you explain -with leisure measured on the vertical axis and working hours on the horizontal along with an indifference curve attached and budget constraint drawn- "why" people are working less if income is held constant (doesn't change)? What direction might the curve move while still tangent to the same budget constraint representing income if incomes were held constant as a part of COVID relief?   

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps with 3 images

Blurred answer
Knowledge Booster
Demand and Supply Curves
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education